Renault to seek loans of up to €5bn to protect against coronavirus
The chairman of French car giant Renault has said that the firm could seek loans of up to €5bn to protect it against damage from the coronavirus pandemic.
Speaking on French radio, Jean-Dominique Senard said: “We are working on the idea of bank loans that would be guaranteed by the state and later reimbursed. This will help us get past this bad period.”
He reiterated that the prospect of Renault being renationalised was not being considered at the moment.
The car giant is 15 per cent state-owned, and was only privatised in 1996.
As with the rest of the European automotive sector, the spread of the disease has forced Renault to shutter factories and suspend production across the continent.
The firm has already began to make use of a French government scheme to furlough workers in order to protect jobs during the low revenue period.
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A source told Reuters that the firm’s board had also decided to cut the firm’s dividend for 2019 due to the disease.
Senard and chief executive Clotilde Delbos will also forego 25 per cent of their salaries for the first quarter, and will do the same in the next quarter if the crisis continues.
Yesterday ratings agency S&P downgraded both Renault and car conglomerate PSA, cutting Renault’s bonds to junk.
“Renault has an ample liquidity cushion and can, in our view, count on guarantees from the French state,” S&P wrote in a research note.
“We nevertheless expect Renault’s earnings, free cash flow generation, and financial position to weaken materially in 2020, following an already challenging 2019,” added S&P.